Indian equity markets witnessed heavy losses on Tuesday, with Sensex and Nifty losing around 200 and 50 points, respectively. After a cautious start, markets traded in green for a little duration, taking support with Industry chamber PHDCCI's statement that the definition of micro, small and medium enterprises (MSMEs) on the basis of turnover will help in promoting the ease of doing business as the process of identification and dealings with such entities will become simpler and faster. Besides, Union Minister Dharmendra Pradhan said the government will soon come out with a white paper on steel industry to make steel industry competitive. But, markets soon turned negative to trade sluggish throughout the session, as International Monetary Fund's report stated that that India is now in the middle of a significant economic slowdown, urging the government to take immediate policy actions to tackle the current prolonged downturn. Markets extended their losses in the second half of the trading session, amid private report stating that the Centre is staring at Rs 63,200-crore shortfall in goods and services tax (GST) compensation cess for FY20 as revenues slow down. Delay in release of compensation to states has already emerged as a bone of contention between Centre and states. Finally, the BSE Sensex lost 181.40 points or 0.44% to 41,461.26, while the CNX Nifty was down by 48.20 points or 0.39% to 12,214.55.

The US markets were closed on Wednesday on account of Christmas.

Extending weakness for the fourth day, Indian rupee ended marginally lower against dollar on Tuesday, as good demand for the greenback from importers. Traders remain concerned with International Monetary Fund's report that India is now in the middle of a significant economic slowdown, urging the government to take immediate policy actions to tackle the current prolonged downturn. Besides, a weak trend at Dalal Street weighed on the local unit. However, losses remain capped as some optimism remained among the traders with Industry chamber PHDCCI's statement that the definition of micro, small and medium enterprises (MSMEs) on the basis of turnover will help in promoting the ease of doing business as the process of identification and dealings with such entities will become simpler and faster. On the global front, euro slipped on Tuesday, heading back towards a two-week low, as optimism about improved US-China trade relations supported the dollar. Finally, the rupee ended at 71.27, 9 paise weaker from its previous close of 71.18 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 6611.79 crore against gross selling of Rs 4369.45 crore, while in the debt segment, the gross purchase was of Rs 1313.27 crore with gross sales of Rs 584.74 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.75 crore against gross selling of Rs 1.78 crore.

The US markets remain closed on Wednesday on account of the Christmas holiday. Asian markets are trading mostly higher on Thursday as investors remained optimistic amid easing worries about US-China trade tensions and on hopes of a global economic pickup next year. Indian markets ended lower on Tuesday, for second straight session, hit by fag-end sell-off in index heavyweights Reliance Industries and HDFC Bank. Markets were closed on Wednesday for Christmas holiday. Today, the markets are likely to get a cautious start ahead of expiry of futures and options contract of December series later in the day and muted global cues due to the holiday season. There will be some cautiousness with the International Monetary Fund's (IMF) statement that India should recommit to cutting on debt by bringing down its public sector borrowing requirements and enhance focus on having greater fiscal transparency to help investors make informed economic decisions. However, some support may come with report that government think-tank Niti Aayog member Ramesh Chand made a case for only two slabs under the goods and service tax regime as against the multiple slabs currently, and said rates should be revised annually if required. Traders may take note of report that the goods and services tax (GST) Council will set up a grievance redressal mechanism for taxpayers. Meanwhile, SEBI has asked infrastructure investment trusts (InvITs) to file draft papers with the regulator and exchanges 30 days prior to opening of the issue. There will be some buzz in the NBFC stocks with report that the non-banking financial company (NBFC) sector, which has been affected by a series of default by IL&FS, reported a sharp jump in gross non-performing assets ratio to 6.1 percent in FY19 from 5.3 percent in FY18. Banking stocks will be in focus with the Reserve Bank of India's (RBI) report that the financial health of state-owned banks should be assessed by their ability to raise resources from markets rather than depending on capital infusion from the government. There will be some reaction in infra stocks with ICRA's report that the new order inflows for construction companies will improve in 2020 with a huge pipeline of projects in the infrastructure sector.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Hindalco Industries has re-started production of Alumina at Muri refinery in Jharkhand.  
• Ashok Leyland has inked a MoU with HDFC Bank for a strategic tie-up on vehicle financing, for a period of two years. 
• Reliance Industries' telecom arm -- Jio has unveiled 2020 Happy New Year offer as part of which it will offer smartphone customers one year of unlimited services for Rs 2,020. 
• Bharti Airtel has launched its voice over Wi-Fi service Airtel Wi-Fi Calling in Mumbai, Kolkata, Andhra Pradesh, Karnataka, and Tamil Nadu, following its introduction in Delhi/NCR.